Important advances have been made recently in understanding molecular mechanisms that control development of pancreas. In spite of this progress, the identity of putative pancreatic stem and progenitor cells remains largely unknown. Based on the results in rodent pancreatic regeneration models, it has been suggested that stem and progenitor cells persist in the pancreas after birth. It has been hypothesized that these cells are responsible for maintaining islet cell mass under normal conditions as well as under conditions of pancreatic damage. Because current experimental models do not provide access to substantial quantities of cells during pancreatic development and regeneration, it is difficult to directly verify the existence of pancreatic stem and progenitor cells. We propose that an efficient in vitro pancreatic differentiation system would facilitate progress in this field. We have developed in vitro pancreatic short-term system, which utilizes adult mouse pancreatic tissue to generate glucose responsive endocrine hormone producing islet-like cell clusters (ILCCs). Although this system does not promote significant overall expansion of hormone-producing cells, we have shown that new hormone-producing cells are generated in these cultures at a rate commensurate with cell loss. In addition to ILCCs, neural cell types are efficiently generated. Among neural cell types, we detect an abundant population (which we refer to as pancreatic neuroepithelial, PNE cells) with phenotypic characteristics of neuroepithelial/radial glial cells of embryonic central nervous system (CNS). Also, an array of pluripotent embryonic stem (ES) cell and multipotent stem cell-specific mRNAs are induced during the culture. The number of PNE cells and the level of expression of stem cell markers peak before ILCC differentiation and fall sharply at the end of the culture. More recently we have established experimental conditions that allow long-term expansion of pancreatic progenitor-like cells expressing Pdx1, the ?master? transcription factor of pancreatic development and a-cell function from cultures of adult mouse pancreas. The Pdx1-expressing cells first appear 4 to 6 weeks after initiation of the culture. Once the cultures are established, the level of Pdx1 approximates that found in adult beta-cells, and remains stable over multiple passages. During the proliferation phase, these cells also express several other transcription factors characteristic of the endoderm, developing pancreas, and low levels of insulin. To our knowledge, we are the first to demonstrate that the adult pancreas can generate Pdx1 expressing cells that can be stably propagated in vitro. We propose that the Pdx1 expressing cells in our cultures are ?primed? for pancreatic differentiation, and it should therefore be possible to coax them into hormone-producing epithelial cells.